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Edd

Vanguard Costs

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Hello all. I have not had a question lately but I have continued reading and I now have a question. ScottyD, I think, pointed out in an earlier post that Vanguard has annual account expenses apart from the expense ratio. These are, at least in my district's account, $15 for each account and another $10 for each index fund with less than $10,000. Fidelity has a $20 annual fee for the entire account regardless of the number of funds. TIAA-CREF, over the telephone told me, does not charge any annual fee apart from the expense ratio.

 

I currently have Vanguard and Fidelity in my 403b and TC in my 457b. In light of these fees, it seems that Vanguard is not so "cheap" after all. They seem, otherwise, to be a great company. I compared the S&P funds from Fidelity and Vanguard and as it should be they are nearly identical, except for the $25 I spend for Vanguard's. The $20 I am charged for the Fidelity account is taken from another fund, and hence the Fido S&P for me would not cost anything other than the expense ratio.

 

Any opinions/comments on my thoughts about not investing with Vanguard due to these "fees" would be appreciated.

Thanks, Edd

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Edd,

 

Edd,

 

This may not be the answer that seeking to your post, but I'll offer an another twist:

After an evaluation of your "Personal Investment Plan" and your investment horizon, you may want to consider investing directly in a "Roth IRA" (post tax contributions)with the Vanguard Group. There are no annual fees except for low balance fees on some various funds and a minimum balance fee for small accounts. I started with one fund and after thirteen months no low balance fees. :^)

This also may add more diversification with your investment vehicles. Additionally, your pincipal, interest, and capital gains will grow tax free. (Unless they repeal tax law)

Since you have paid tax already, you may access your origonal contributions after five years without penalties.

There are numerous calculators out there that can provide comparisons of investment vehicles between pre-taxdeferred, taxable, and Roth. You may be suprised!

 

I learned the hard way several years ago the benefits of diversification. When it comes to putting all of my chickens in one house I know the chance's are temptingly high the house may be raided by the foxes. Result, I'll yield fewer eggs and even fewer .

 

Diversify, diversify, diversify!

 

Respectfully,

Warren P.

 

 

PS. Caution, beware of the farmer too!

 

 

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Hi Warren, thanks for your input. I have a Roth with Dodge&Cox and Ariel. I have tried to acheive diversifiecation and am not comfortable with having all my dough with only one company. This is why I currently have five companies-Fidelity, Vanguard-403b, TC-457b, D/C,Ariel-Roth Ira.

 

My diversification includes large value/growth, small value/growth, some mid, REIT fund, bonds, a little sectors in Tech, Health, Financial, and a little in TC annuity.

 

Any thoughts on the fees charged by Vanguard in the 403b---not charged for the same by Fido, TC and perhaps others?

 

P.S.-I would like to post this question on the Vanguard site-Diehards.org-but have not been able to initiate. Any input on how this is done? Thanks.

Edd

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Edd,

Nice work on diversification!

It's been a while since I've signed on to Diehards.org, but I would recommend going through morningstar.com and go to the "discuss" area on thier navigation toolbar. From there you can sign up free/register and then post on the "Diehards forum" it similar to a mirror site of DH.org. Same format and mutual content of posting.

Diehards.org has a bit of a different search function than Morningstar and contains links to some great resources.

 

As to Vanguards fee for 401k's 403(b)'s and other company plans, I believe this is just cookie cutter policy for Vanguard.

 

Warren P.

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